Client loyalty takes a backseat to price risesby
The latest round of energy price rises sets a bad precedent for the profession. But Philip Fisher argues that client loyalty is still worth its weight in gold, whatever those in other industries and politicians may think.
Readers were probably far than overjoyed to discover that energy prices are to rise significantly in the autumn. For anyone who does not have a fixed price contract, the increase is likely to be in double figures in percentage terms.
This will hit our pockets but many might not immediately see a direct connection to the accountancy profession.
However, those that heard an interview with Jonathan Brearley, the chief executive of Ofgem, might not have been surprised to hear him uttering the standard mantra that customers should shop around for the best tariffs and switch contracts as soon as possible.
This desire for competition at any cost has become standard political talk for years and should bring distress to the ears of every accountant who has worked hard to build up a practice and a brand.
Sticking with the power companies for a second, after a series of disasters over a 2.5 year period which are currently heading towards the Ombudsman thanks to the persistent failures of a company that had better remain nameless, your columnist was delighted to discover a new company that gets fantastic ratings from customers and really does seem to care.
Having gone through all of the traumas and finally found the good guys, it was quite shocking to discover that the man charged with regulating the industry strongly believes that in a year or two this accountant should be deserting them and signing up with an inferior company in order to enjoy fair pricing.
What should happen in any kind of sane society is that customers are rewarded for loyalty. It would be nice to see prices frozen or increases limited for those that have been with a supplier for several years and perhaps even going down subject to inflationary pressures.
This would make financial sense, since as we know from bitter experience not having to find and embed new customers will cut operating costs for suppliers. As long as they can make money out of loyal customers, they should also be better off and seek to provide optimum service.
The current set-up almost encourages companies to offer poor service and do their damnedest to rip off customers.
This is where the parallel with our own profession comes in. Most of us have spent our whole careers working hard on building up relationships with loyal clients.
We all know that trying to draw in new clients is much harder than keeping old ones and the pandemic won’t have made this challenge any easier. This kind of loyalty often pays off in trumps in the long run when the big projects pop up, as clients either seek to expand their businesses through acquisition or possibly sell them.
Even better, most of us understand that clients who are happy with the service that they get from their accountants not only give them additional work but also recommend them to friends and acquaintances. The corollary is also true, since those that treat clients badly get a terrible reputation and, particularly in tight communities or sectors, may struggle to keep existing clients or entice new ones.
Perhaps we have been getting it wrong. Maybe the route to commercial success is to treat all customers like dirt, overcharge them as much as possible and assume that they will walk away every couple of years.
We then just replace them with other mugs who are willing to get cheated, at least until they notice and then perpetuate the cycle.
I really hope that that is not the case, since making clients happy, building up long-term relationships and making good if not exceptional profits every year by doing so seems like a far better way to live than the tawdry alternative promoted not only by power companies but also their regulator and generations of politicians.